Trai gets it wrong: Bundling beneficial for both consumers, producers

Bundling is back in the news, and possibly for the wrong reasons. The Telecom Regulatory Authority of India (TRAI) has, once again, taken a rather dim view of bundling in the broadcasting industry, presumably in consumer interest. They say bundling is non-transparent, costly, and subscribers end up paying for channels they do not watch. While the allegation might have some traces of truth, the reality is much more complex. Besides, the alternative that is sought to be put in place doesn’t really deal with the initial problem, in some cases, making the situation worse.

Let’s start from the beginning. What is bundling, and why does it raise the hackles of regulators? Bundling is selling two or more goods, or services, at a single price. The constituents of the bundle may be related, unrelated or tied (inseparable). Bundling attracted the antitrust glare in the late 1990s, when Microsoft ‘bundled’ its browser, Internet Explorer (IE), with its Windows operating system (WOS).